Early Monday, after several weeks of marathon negotiations that brought together both environmentalists and Wall Street bankers, TXU announced that its board of directors had approved the bid from Kohlberg Kravis and Texas Pacific for about $45 billion, which would be the largest buyout in history.
The deal was noteworthy not just for its size, but for the confluence of business decisions and environmental concerns that drove the ultimate transaction.
If you still weren’t sure that the business landscape is being profoundly changed by global warming, the investors (according to former EPA Administrator William K. Reilly, who works for Texas Pacific) will
commit themselves to scale back significantly on TXUâ€™s plan to build 11 new coal plants and adhere to a strict set of environmental rules.
Why? A powerful confluence of environmental concerns and business concerns.
Within TXU, the controversial plan to build a raft of coal plants had become so damaging to its stock price that its board had been privately weighing a plan to scrap part of the project.
(I’ve been thinking a lot about coal lately, musing about the financial strategies that would enable shutting down and writing off the entire industry. Why not buy out owners, employees and communities — and take the financial hit now, rather than over a century or two of continued subsidies and escalating environmental and climate damage. It seemed like a pipe dream, or at least a dream that needed a lot of details worked out. It may be that events will move faster than I ever imagined.)